Documents published by Birmingham City Council today reveal the local authority favours establishing an independent company owned wholly by the council, in the form of a community interest company, rather than a staff-owned mutual, an option that is deemed to carry a number of "significant risks".
The wholly owned company is deemed to be a better model for controlling costs and generating profits - something mutuals are currently legally prohibited from doing, the documents reveal.
It is feared a mutual could potentially be "too independent", making stepping in difficult in the event of any poor performance. It would also be complex to implement as it would be the first one in the country and would potentially take longer to set up.
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